Sunday, June 29, 2008

We all know that even in the United States the guarantee of free speech has limits. The Supreme Court long ago said that no one has the right to endanger his or her fellow citizens by, for instance, falsely yelling "fire" in a crowded theater. Such acts of speech are said to pose "a clear and present danger." James Hansen, perhaps the most respected climate scientist on the planet, thinks that the fossil fuel lobby and its disinformation campaign about global warming may pose a similar threat.

Hansen, speaking before the U. S. Congress last week, said that the CEOs of fossil fuel companies should be tried for "high crimes against humanity and nature." He said they deserve this fate because they know full well that continued burning of fossil fuels threatens the stability of the climate and with it civilization. Yet, they purposely confuse the public to forestall the day when limits will be placed on carbon emissions from such fuels.

(A later decision by the U. S. Supreme Court narrowed the test for prohibited speech to that which incites or is likely to incite "imminent lawless action," and so there is absolutely no danger that fossil fuel industry executives will ever be prosecuted for what is now legally regarded as protected political speech.)

Why does Hansen speak in such seemingly hyperbolic language? He does so because his own research suggests that the highest advisable level of carbon dioxide in the atmosphere is 350 ppm. The current level is already 383 ppm and growing by 2 ppm each year. We have passed a critical point in the global warming saga, and we must now retrace our steps. Hansen therefore believes we must actually find ways to reduce not the growth of emissions, but to reduce emissions altogether to a point that will allow greenhouse gas levels in the atmosphere to fall.

This he says must happen quickly, and the reductions must be drastic or we will face catastrophic consequences, ones that will become unstoppable long before they actually occur because of the delayed effects of carbon emissions. These consequences include worsening floods and droughts, much higher shorelines, massive extinction of species, possible rapid climate shifts in parts of the world, and other problems that will threaten the food, water and general well-being of all humanity.

But public discourse on global warming is being muddied. Here in the United States it is a matter of faith that the cure for faulty free speech is more free speech of the factually correct kind. It is the only response truly anticipated by the U. S. Constitution. There is unfortunately the slight problem that the fossil fuel industry has huge sums of money with which to pursue its freedom of speech in the media. There is another problem in the case of global warming, namely urgency.

For comparison let me offer a brief recap of an historically important issue in American history. It is a great injustice and disappointment that women did not obtain the right to vote after the Civil War along with freed male slaves. It was a disappointment because so many women had worked so hard for abolition. It took another half century of advocacy before they were finally granted that right. While no one should minimize the struggle for woman's suffrage in the United States, it was a struggle--however painful and filled with injustice--that could wait for the principles of free speech to be vindicated without endangering all of humanity. But the amplified free speech of the fossil fuel industry's disinformation campaign does indeed threaten all of humanity. And, the outcome of the struggle between the forces of change and reaction cannot wait 50 years to be resolved on the side of right. By then all the worst damage will be inevitable.

There are so many other issues which fit into this category as well: the depletion of fisheries; the destruction of soil; the peaking of oil; the catastrophic loss of biodiversity due to logging, modern industrial agriculture and urban development; the poisoning of the water, air and food supply with toxic chemicals; and the depletion of precious fresh water. Most of these issues are interlinked with global warming and with each other to one degree or another.

As the clock ticks down to tipping points for each of these problems, will the cherished principles of an open society be challenged? Will those principles continue to be used to delay or water down action and thereby threaten the lives and livelihoods of billions? Or will those principles be modified in some way that allows free speech, but limits the amplified kind that huge sums of money can buy in the modern media?

If we had 50 years to debate all these problems, I am certain that the side espousing sustainability would win. Given the urgency with which I believe we must address these issues, is it an acceptable outcome to be able to say "I told you so" at some future date as modern society crumbles in the face of these challenges?

I don't claim that the issue of free speech and the enemies of sustainability is an easy one for those of us who embrace the notion of an open society, that is, a society where no one is presumed to have a monopoly on truth and where we work together sometimes even through the violent clash of opinions to advance the search for truth. What the ecological and resource challenges we face now call into question is whether an open society is capable of making the kind of change we need to make as quickly as we need to make it.

One could argue that ours is not an open society, but rather one dominated by corporate power and that it is corporate power that must be reined in as part of the process of moving toward a sustainable society. But once again we are faced with the time problem. How long will it take for the normal processes of a nominally open society to bring corporate power to heel? 10, 20, 50 years?

The path for most people interested in creating a sustainable society is to start creating one. But will the powers which are working against such a society make those efforts moot? And, if that is the case, with so much at stake, is there a third way of addressing free speech that preserves the basic principles of an open and democratic society, but still allows for those who have the evidence and the logic on their side to prevail in time to avoid the worst?

So far, I have yet to find such a way that does not destroy the very open society I seek to preserve.

Thursday, June 26, 2008

Our current transportation system uses enormous amounts of energy primarily to move the weight of vehicles which transport passengers and freight. Bill James thinks we can improve transportation energy efficiency by an order of magnitude if we focus on moving the weight of passengers and freight instead of the weight of the vehicles that carry them....Read more

Sunday, June 15, 2008

The high price of oil has given birth to a thousand solutions. They include such fantasies such as running cars on water and perpetual motion machines. And, they include sensible ideas for quickly cutting the consumption of oil and moving to electricity to power most of our transportation fleet. The American Petroleum Institute (API), the oil and gas industry's lobbying arm, has its own proposals, of course, and not surprisingly they include opening up protected public lands and U. S. coastal areas to drilling.

That API's ideas might be more appropriately grouped with fantasy solutions is illustrated by the organization's own recent television advertising campaign. The campaign includes four separate ads. Two of the ads offer a defense of oil industry profits. One touts the broad ownership of oil company shares by pension funds and implies that viewers' pensions might very well be benefitting from the superb financial performance of the energy industry. The other ad suggests that oil companies really don't make that much money when compared to other industries in America. This would presumably make oil companies poor investments for one's pension fund. But no matter, to avoid confusion the two commercials are probably never scheduled to run back to back.

The remaining two spots deal with the energy crisis. In one a professionally-dressed woman tells us that "we have substantial oil and natural gas resources right here," as she walks across a map of the lower 48 states. "Enough to power 60 million cars and heat 160 million households for 60 years," she continues. The reason for her optimism is that "with advanced technology and smart policies, together we can secure America's energy future."

It's hard to put footnotes into a 30-second spot though API had no trouble footnoting the U. S. Energy Information Agency and the International Energy Agency when it wanted to make the point that 45 percent more oil and gas will be needed by 2030. Let me propose some of my own footnotes. Here is the full text of the ad with my footnotes added below:

Oil and natural gas powered the past. But the future? Fact is a growing world will require more, 45 percent more by 2030 along with greatly expanding alternatives. We have substantial oil and natural gas resources1 right here [NARRATOR STROLLS OVER MAP OF THE LOWER 48 STATES].2 Enough to power 60 million cars3 and heat 160 million households for 60 years.4 With advanced technology and smart policies,5 together we can secure America's energy future.6 Log on to learn more.

(1) Only of fraction of those oil and natural gas resources are ever likely to be recovered for both economic and technical reasons. There is no guarantee that those that we do recover will come out at the rate we want them to.

(2) Includes all offshore areas such as Cape Cod, Hilton Head, Miami Beach, the Gulf of Mexico and the California, Oregon and Washington coasts. Also included are all wilderness areas of Alaska (not pictured).

(3) 60 million cars sounds like a lot, but that represents only a fraction of the more than 250 million highway vehicles currently registered in the United States.

(4) The "60 years" claim is theoretical (and perhaps mere fantasy). See footnote 1. Also, powering cars and heating homes assumes that the highest and best use of oil and natural gas is to burn them notwithstanding their high value as feedstocks for thousands of chemicals and others products that are critical to the modern world.

(5) "Smart policies" is shorthand for opening up all public lands and offshore areas in the United States to drilling.

(6) This doesn't mean energy independence. The U. S. will still be importing more than half its oil by 2030 according to the U. S. Energy Information Administration. We won't really be secure.

In fact, by suggesting that domestic oil resources could power 60 million cars, API is admitting that energy independence is a false hope even as they confuse viewers with the notion that we Americans will be more secure.

Of course, if all my footnotes were required, say, in the manner of warning messages included in prescription drug ads, viewers might be just as queasy about API's plan for America's energy future as they ought to be about some of the drugs they see advertised on television.

What might make viewers even more queasy is a second API ad which claims that we get two-thirds of our oil and natural gas from North America. This is a rough but reasonable estimate of the heat value of the oil and natural gas combined. But, once again we find ourselves watching API's spokeswoman walking across a map of the lower 48 states as she delivers her message. Perhaps Canada and Mexico from whom we import significant quantities natural gas and oil are too large to represent on the map. Or perhaps it would be a little impolitic to treat Canadian and Mexican oil and natural gas as if it belonged to the United States. Better to leave both countries off the map and hope that nobody notices. People might begin to think inconvenient thoughts such as, "Why should the Canadians and the Mexicans simply sell us all the oil and natural gas we want? Maybe they'll need it for themselves. Oh, and by the way, didn't I hear that Mexico's oil production is declining and Canada's natural gas production is flat?"

Those who ignore the borders between Canada and the United States and the United States and Mexico must not like the inconvenient facts of sovereignty. Jerome a Paris, writing on The Oil Drum: Europe put it this way in a recent article:

One is to think that political obstacles are minor, i.e., that it will be easy to force Russia or Saudi Arabia (or Venezuela or Iran or even U.S. politicians) to open their door or the spigot. This perpetuates the narrative that other countries [on] the planet are here to provide us with the necessary goods or services, independently of their own priorities or needs; it conveys that their sovereignty is a fiction that we tolerate with just a bit too much patience, but that we could push out of the way if it really became necessary.

Two years ago some readers balked at my idea that the United States and Canada could enter a period of bitter tension (although probably not open conflict) as energy resources, especially natural gas, become scarce in North America. But can such an idea be far from the mark when API is telling us that we can get whatever energy resources we want from Canada and Mexico?

One of the most important facts which API omits from its television ads, but does mention obliquely in a policy piece on its website is that the vast majority of the resources to which they refer are "undiscovered." The group isn't even talking about known deposits waiting to be assessed for their potential. API states that "federal lands hold an estimated 656 trillion cubic feet of recoverable natural gas" and "an estimated 112 billion barrels of recoverable oil." This probably refers to what the government calls technically recoverable. Rocks from the Moon are technically recoverable, but they are very expensive and difficult to get. And so, none of this tells us whether this undiscovered, technically recoverable oil and gas will ever be found and tapped.

There is likely to be some economically recoverable oil and natural gas on federal lands. But is it wise to make public policy on such an important issue as energy based on estimates of oil and natural gas that have yet to be discovered? The Bakken Formation in North Dakota, Montana and Saskatchewan has been touted as having 3 to 4 billion barrels of technically recoverable oil reserves. But it seems doubtful that we will ever get that much oil out of it. And, even if we did, it is worth remembering that at the current rate of consumption, these barrels would last the world somewhere between 36 and 48 days (12 days for each billion barrels).

In this environment of high oil and natural gas prices, those who have a vested interest in drilling will naturally lobby for the right to do so. This really shouldn't strike anyone as strange. What we should not do is base our energy policy on the outlandish pronouncements of industry players about the success they expect.

Sunday, June 08, 2008

When we think about the scope of the ecological challenges we face--peak oil, climate change, soil degradation, water depletion and species loss--we often think of responses big enough to match them. We might ponder large, national or international crash programs for the deployment of alternative energy; for the conservation of energy, water and habitat; and for the spread of organic agriculture and gardening. We might also think of a global agreement to slash greenhouse gas emissions deeply and quickly. But, the larger the responses one imagines, the more improbable their implementation seems. Governments are moving only slowly or sometimes not at all in the direction of sustainability though some corporate efforts are moving much faster.

In an age of gigantic government and corporate research projects, it is easy to lose sight of the fact that the majority of human technical and even social progress has been made through trial and error, in other words, through tinkering. Unfortunately, tinkering has been given a bad name by the dictionary. "To tinker" is variously defined as 1) "to busy oneself with a thing without useful results," 2) "to work unskillfully or clumsily at anything," and 3) "to repair in an unskillful, clumsy, or makeshift way." But there is a more neutral definition as well: "To make unskilled or experimental efforts at repair."

An Internet-based system called Bright Neighbor designed by Portland, Oregon resident Randy White allows people living in a neighborhood, village or town to coordinate simple things such as ridesharing or tool lending and more complex tasks such as planting a community or individual garden.

A system of public transportation referred to as JPods seems to take its inspiration from both the gondola and the monorail and could create a cheap alternative to building light rail lines. In addition, JPods can be designed to run on solar power generated by panels mounted above the overhead track. JPods founder Bill James says he is close to lining up the financing for the first JPod system at the Mall of America in Bloomington, Minnesota.

Permaculture and urban gardening are already well-established practices. But the idea of turning every large suburban lawn into a permaculture garden and many of the empty spaces and backyards in cities into urban gardens is a task that has barely begun. It has the potential, however, to provide a huge increase in the world's food supply in ways that are healthy for people and soil and also easy on the climate since transportation needs are minimized.

Community currencies, which only circulate locally, offer an opportunity to keep money flowing within the community where it is earned. That benefits all who live there. Such a currency also offers a method of exchange the value of which is not determined by international currency traders, but by the hard work and ingenuity of community residents.

None of these ideas by themselves will create a sustainable society. But each can be tested and adapted to the locale where the testing takes place. Allowing everyone who wants to to become an experiment station speeds greatly the adoption of new practices and technologies. In this way, such tinkering may work better and faster than any grand government plan to spread sustainable practices and technology. The secret weapon, of course, is modern communications, especially the Internet. The success or failure of promising sustainability projects can be transmitted almost instantly across the world, and the details for implementing new practices can move just as fast.

It's likely the scale for most successful sustainability ideas will be no larger than that of the town or region. This explains why tinkering could be a more successful sustainability strategy than any centralized research. If thousands of minds toiling under a variety of conditions in many places are working on a problem, it just might get solved faster and more satisfactorily than if several hundred or thousand are working on it at a research institute or corporate research department away from where it will be implemented.

Still, it is hard to see how a problem such as global warming might be tackled without broad international efforts and regulation. The tinkerer might be able to come up with ways for making deep reductions in carbon emissions affordably. But, he or she won't have any market for those methods without government regulations forcing the curtailment of greenhouse gas emissions. Who is going to put up wind generators and solar panels at the rate necessary to displace fossil fuel plants unless the government makes it profitable and perhaps even mandatory to do so?

While we struggle to create a political climate more friendly to sustainability practices in the face of lethargic and often unresponsive political systems, it is the tinkerers who have stolen the march and are rapidly creating the needed platforms for social, economic, technical and even political progress. Let a thousand flowers bloom. One second thought, why not millions.

Sunday, June 01, 2008

It is a commonplace among hard money advocates that the U. S. dollar and all other fiat currencies are doomed to become worthless. History seems to be on their side. There is a long list of currencies based on nothing other than the say-so of a government that have indeed become worthless or near worthless. Perhaps the most often cited example is that of the mark during the great German hyperinflation. From the beginning of 1922 until the currency was replaced in November 1923 inflation was nearly 2 trillion percent.

In this case, one of the few options beyond bank deposits available to Zimbabweans with savings is the stock market. Controls on exchanging the local currency for foreign currency have made it exceedingly difficult for most people to move much of their savings or current paychecks into more stable currencies. With the stock market practically the only outlet for those with savings, Zimbabweans pushed up stocks by more than 300,000 percent in 2007, handily beating inflation of 24,000 percent. The point is that it didn't pay to keep cash in the bank or anywhere else for that matter. The stock market at least offered the opportunity to invest in businesses with tangible assets that appreciate with inflation.

Before we go any further, it is worth examining why those investors are moving so heavily into the commodities markets. First, there is the ongoing robust demand for commodities of all types, but especially metals, grain and oil and the apparent strain on supply. Fundamental factors are driving up prices, and rising prices attract speculation. Second, there is the pleasant fact that there is no president of copper or wheat or pork bellies. This stands in stark contrast to publicly traded companies whose top managers have all too often in recent years deceived and defrauded their investors. Those holding commodity investments are in most cases only taking the risk that the price of those commodities will go down (or up, if they invest on the short side). Outright fraud in the heavily regulated commodities futures markets is exceedingly rare and difficult to bring off. Third--and this is the most salient point for this discussion--most commodities are denominated in U. S. dollars. When the dollar declines in value against other currencies, commodities generally move up.

At the margin, institutional investors are voting with their money against the U. S. dollar and perhaps against currencies in general. Here it is worth noting the presumed purposes of a currency. First, as everyone knows, currency is a medium of exchange. It's easier and more convenient to use currency for exchange purposes than to try to barter for everything. Second, currency often serves as a store of value. While we wait to decide what to buy with our money, we usually put it in the bank where it earns interest. Sometimes we put it in for a long time in the form of a retirement account or a college savings plan. It is this second function of currency which is being called into question, not just in the United States, but worldwide, for the so-called speculation in commodities is now a worldwide phenomenon.

Governments naturally fear any loss of faith in their currencies. But rather than address the reasons behind that loss of faith, they typically focus on making it more difficult to move money out of one's home currency. That's because it is the easier of the two tasks. Hence, Mr. Lieberman's proposal. The proposal would make it more difficult for large institutional investors to move out of their home currency, in this case, the U. S. dollar, and into commodities.

All of this would be of little import were the world about to return to an environment of low commodity prices, fiscal probity by governments and households, and noninflationary economic growth. Under such circumstances people would have little reason to flee their own currencies. But the trajectory of the world seems decidedly in the opposite direction. And, the focus on oil as a store of value by investment managers may only be the beginning.

The tremendous demand for basic materials needed by growing Asian countries continues to levitate prices of metals such as copper and zinc; foodstuffs such as soybeans and corn; and oil, of course. Oil prices may subside from their recent highs, but it seems unlikely that they will fall to levels even remotely close to those experienced at the beginning of this decade. Moreover, governments and their central banks seem determined to keep their economies growing with expansionist monetary and fiscal policies. More debt-funded spending and more money printing are the order of the day.

What frightens policymakers more than institutional investment managers moving money into commodities is the possibility that average citizens may attempt to flee their own currency. The avenues open to them, however, are considerably more narrow. Certainly, those who have brokerage accounts can call their brokers and ask that their money be shifted into commodity investments. But that is a small subset of the world. The rest of the population is left with turning their ready cash or small savings accounts into real things: jewelry, coins, precious metals, even sides of beef for storage in the deep freezer. But this part of the population usually doesn't realize what is happening to them until the cost-of-living has been rising for some time, and so they are the most vulnerable segment of society. When they do realize what is happening, their collective rush to the exits is so large that it can create a very high rate of inflation and even hyperinflation as real things are bid up and money is spent as quickly as it is earned.

By themselves high prices for energy, food and other essentials do not wreck a currency. But they do lower the standard of living for everyone except those whose incomes are directly tied to profits in the relevant sectors of the economy. What could wreck the world's currencies is a desire to offset the effects of the ever-tightening noose of resource scarcity caused by the approach of peak oil, the march of climate change, and the rapid industrialization of the Far East. The desire to offset these effects is already expressing itself through easy money policies and the financing of government expenditures through borrowing rather than taxation. As scarcities build, the temptation will be ever greater for governments to go down the path of high inflation. None of them will intend, of course, to cause hyperinflation. But it will be an ever-present danger.

Some say that if the U. S. dollar crashes and brings with it a hyperinflation, this will be the end of money as we know it. A few predict that the phenomenon will eventually be worldwide and result from the economic effects of peak oil and climate change. Even if these scenarios do occur, I doubt that it will be the end of money as we know it. The convenience of electronic payments and paper money are too great for people to give up. Even the poor Germans of the 1920s didn't want to give up that convenience. When the German government announced the introduction of a new currency to replace the worthless mark, people accepted it and used it right away.

Perhaps what will be different this time is that while most people will want the convenience that paper money and electronic payments provide, fewer of them will trust money as a store of value. What that means for individual commodities is anybody's guess. But, unless 1) we are miraculously delivered into a time of plenty by huge, unexpected discoveries of the basic building blocks of civilization or 2) people suddenly en masse embrace an abstemious lifestyle (or are forced to embrace it by a depression), it seems possible that one time-honored role of money, that is, as a store of value, will disappear for an extended period as the world comes to grips with resource limits that are only now beginning to convulse our societies.